Change in strategy to focus on large banks:
So when we are talking of changing strategy, we are talking about pivoting from the smaller
bank sizes to a larger addressable bank, which are banks above $20 billion or $50 billion up to
$200 billion, which is typically around 100 accounts.
Opening Remark:
Q1 Revenue 25% growth. PAT at 48 cr. growth of 58% YoY. Margin at 15%.
Marketing and sales investment continue and increased.
Q1 is weakest quarter, though seasonality is reduced.
Q1 Annuity revenue is 201 cr.
More than 10 cr order from Indonesian state bank, Malaysian government bank, US Retail bank , Qatar bank. Large Indian company selected Newgen for loan originating system.
New Product:
Generative AI hyper personalization platform specifically for banking sector, will improve profitability and customer experience world wide. It help banks to have upscale and cross sell opportunity. Very few products like it and excitement in market.
It is essential to launch new products to have growth.
It take 3 to 4 years to give numbers for new products. Marvin is Gen AI Horizontal product. LumYn is target for hyper personalization.
Guidance:
PAT Margin guidance at 20% to have not much churn. productivity increase.
Deal size increasing by 20 to 25%. Hope to trend continue.
Annuity and implementation split will be same.
Continue with margin and spend on marketing and sales.
General comments:
Partnership revenue is 20% and direct at 80%. Same level.
Generally get 10-15 deals/Quarter, Q1 get 13 deals.
Leadership in traditional market, aspiration to have it in US and Europe. US have early signs of revival but still do not have big momentum.
Expenses are write off and not capitalized.
Generally 15 to 20% revenue from new logos.
Q1 hired 500 campus people from Jan 2024.
Cash at 850 cr.
Q1 20%, Q2 20%, Q3 30%, Q4 30% revenue bring in broad.
ESOP will not have incremental effect on P&L it is similar, what done in last 3 years.
Investor presentation:
Conference call:
https://landing.newgensoft.com/hubfs/_2020%20Website%20files/IR/NGS0220240718153998.mp3.
D: Invested
The stock price going down even after stellar results ? I wonder how investors are not aware of the cyclical nature of Newgen’s earning, Q1 being historically the weakest and Q4 being the strongest. People should look at YoY and not QoQ when it comes to newgen. One must wonder whether Q1 results can always be a good time to load up because of the a large swathe of people not being in the know of this fact.
I think the stock price is going down because whole nifty midcap and smallcap index are going down. The results were already factored in when the stock rallied in last two weeks.
Bear markets ( or market going down) is very secular…It takes everything down with it. No questions asked.
ya… I think it is just an opportunity to accumulate more.
